The world's largest music company is backing a deal that will allow consumers to download music for free.
The new service, involving New York-based SpiralFrog and Universal Music Group, will rely on advertising to create revenue, representing a departure from Apple's 79p-a-song offering in the UK and other legal download services which at present charge a subscription fee.
SpiralFrog is initially planning to launch its free service in Canada and the US in December. It is hoping to launch in the UK and other European markets by next March and the Far East at some future date.
The move reflects the willingness of music companies to experiment as they try to cash in on some of the benefits from the boom in digital distribution which is still dominated by illegal file-sharing networks.
A report published last month by the International Federation of Phonographic Industries (IFPI) claimed 40 illegal downloads were made for every legal one in the US. The ratio, believed to be much the same in the UK, costs the music industry tens of millions of pounds in lost revenue each year.
Glasgow-based rock band Snow Patrol, U2, and American singer Gwen Stefani are among artists tied to Universal whose music could be downloaded free as part of the new service. SpiralFrog has also held talks with EMI, Sony-BMG and Warner Music and hopes they may be lured by the surge in advertising which could be on the site.
Should agreement be reached, music by EMI artists who include Coldplay, Robbie Williams, and Pink Floyd; Annie Lennox, Alicia Keys, and Rod Stewart who are signed up with Sony-BMG; and Madonna, Daniel Powter and REM from the Warner Music stable could also be downloaded free. SpiralFrog says half of the advertising revenue generated would be paid to the record labels.
Robin Kent, SpiralFrog's chief executive officer, said: "Offering young consumers an easy-to-use alternative to pirated music sites will be compelling. SpiralFrog will offer those consumers a better experience and environment than they can get from any pirate site."
Lance Ford, chief marketing and sales officer with SpiralFrog, said: "Record labels get no money from pirated songs which makes it a very bad financial situation for them. We hope to change the behaviour of a generation of teenagers and 20-somethings who won't pay for music because they know they can get it for free. We are going to try and launch with as much content as we can. Anything we don't have we are hopeful of getting as the site becomes more established."
Mr Ford said the new service would not be compatible with Apple's iTunes. He said it was not in direct competition to iTunes and could even benefit it because people using SpiralFrog's service may go back to iTunes to buy a song after hearing it for free.
Josh Lawler, a US-based music industry legal specialist, said news of the new service was "inevitable". He said questions over how artists would be paid may make some reluctant to agree to the free service. "SpiralFrog will have to find a way to pay artists from the advertising dollars they are generating," he added. "But they're not necessarily going to know how many advertising dollars there are and so some artists are going to be hesitant about it."
The music download industry is a vastly growing market. According to the IFPI, 60 million MP3 players were sold last year while 420 million single tracks were downloaded during the same period, 20 times higher than the number in 2003.
Source: http://www.theherald.co.uk
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